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on Labour Economics |
| By: | Marta C. Lopes |
| Abstract: | This paper estimates the impact of unemployment duration on re-employment wages. Using administrative data on the Portuguese unemployed between 2005 and 2012, we employ a control function framework through the defi nition of potential duration of unemployment benefi ts to solve the simultaneity present in the re-employment wage equation. We consider three alternative strategies to predict the unemployment duration: the potential duration of unemployment benefi t, the change in the rules of the potential duration with the 2007 reform, and the age discontinuity in the potential duration rules of unemployment benefi t. The results show that each additional month in unemployment duration is expected to decrease the reemployment wage by 0.5%. When we analyse the sensitiveness of our results, there seems to be presence of a moral hazard behaviour in case the individual became unemployed by mutual agreement. Moreover, the negative eff ect of unemployment duration on re-employment wages shows a relatively high persistence, which only vanishes three years after the date of re-employment. Therefore, additional job assistance programs may be justifi ed in Portugal (Carneiro et al., 2015).JEL codes: J31, J64, J65 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp608&r=lab |
| By: | Joseph Ferrie; Catherine Massey; Jonathan Rothbaum |
| Abstract: | Studies of US intergenerational mobility focus almost exclusively on the transmission of (dis)advantage from parents to children. Until very recently, the influence of earlier generations could not be assessed even in long-running longitudinal studies such as the Panel Study of Income Dynamics (PSID). We directly link family lines across data spanning 1910 to 2013 and find a substantial “grandparent effect” for cohorts born since 1920, as well as some evidence of a “great-grandparent effect.” Although these may be due to measurement error, we conclude that estimates from only two generations of data understate persistence by about 20 percent. |
| JEL: | J62 J68 N32 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22635&r=lab |
| By: | Hornstein, Andreas (Federal Reserve Bank of Richmond); Kudlyak, Marianna (Federal Reserve Bank of San Francisco) |
| Abstract: | We introduce a simple representation of endogenous search effort into the standard matching function with job-seeker heterogeneity. Using the estimated augmented matching function, we study the sources of changes in the average employment transition rate. In the standard matching function the contribution of market tightness (matching efficiency) is increasing (decreasing) in the matching function elasticity. For our augmented matching function search effort is pro-cyclical for small matching elasticity and accounts for most of the transition rate volatility, with small contributions from market tightness and matching efficiency. For a large matching elasticity search effort is strongly counter-cyclical and large movements in matching efficiency compensate for that. Regardless of the matching elasticity, we find a substantial decline of the matching efficiency after 2007. |
| JEL: | E24 J63 J64 |
| Date: | 2016–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2016-24&r=lab |
| By: | Amanda Agan; Sonja Starr |
| Abstract: | "Ban-the-Box" (BTB) policies restrict employers from asking about applicants' criminal histories on job applications and are often presented as a means of reducing unemployment among black men, who disproportionately have criminal records. However, withholding information about criminal records could risk encouraging statistical discrimination: employers may make assumptions about criminality based on the applicant's race (or other observable characteristics). To investigate BTB's effects, we sent approximately 15,000 fictitious online job applications to employers in New Jersey and New York City both before and after the adoption of BTB policies. These applications varied the race and felony conviction status of the applicants. We confirm that criminal records are a major barrier to employment: employers that ask about criminal records were 63% more likely to call back an applicant if he has no record. However, our results support the concern that BTB policies encourage statistical discrimination on the basis of race: we find that the race gap in callbacks grows dramatically at the BTB-affected companies after the policy goes into effect. Before BTB, white applicants to employers with the box received 7% more callbacks than similar black applicants, but BTB increases this gap to 45%. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00539&r=lab |
| By: | Marchal, Léa; Naiditch, Claire |
| Abstract: | This paper provides a micro-funded theory of multilateral resistance to migration analyzing how financial constraints determine migration trends. We build a RUM model in which we explicitly introduce the budget constraint in the migration decision: individuals cannot afford migrating to a destination for which the migration cost (which depends on the immigration policy of the destination country) is higher than their current income. We find that the migration rate between two countries depends on the characteristics of the origin and destination countries and their relative accessibility, and also on a budget constraint term. This term depends on the attributes of alternative destinations. Thus, the model exhibits multilateral resistance to migration. We perform a numerical analysis based on 23 European countries in 2008 and evidence multilateral resistance to migration induced by the implementation of intra-EU migration restrictions following the 2004 EU enlargement. |
| Keywords: | Migration,Budget constraint,Immigration policy,RUM model,Multilateral resistance to migration |
| JEL: | F22 J61 O15 C63 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2051&r=lab |
| By: | Christopher J. O'Leary (W.E. Upjohn Institute for Employment Research); Burt S. Barnow (George Washington University) |
| Abstract: | The federal-state system of unemployment insurance (UI) in the United States was established by the Social Security Act of 1935 during the Great Depression. Under the program, states provide temporary partial wage replacement to involuntarily unemployed workers with significant labor force attachment. The federal government induced states to establish UI programs through two means: 1) a uniform federal tax imposed on employer payrolls, with a 90 percent reduction granted in states operating approved UI programs, and 2) grants to states to administer their programs. The system has evolved into a collection of separate state programs adapted to different regional, economic, and cultural contexts that all meet the same standards. This paper reviews state practices concerning applicant eligibility, benefit generosity, and benefit financing, with the aim of revealing lessons for a possible European unemployment benefit system (EUBS). We examine areas of federal leadership, explicit federal-state cooperation, and state innovation. While the U.S. system offers some good ideas for setting up an EUBS, there are also lessons in some shortcomings of the U.S. experience. We identify areas of risk for individual and institutional moral hazard in a multi-tiered UI system, and give examples of monitoring methods and incentives to ameliorate such risks. We suggest approaches for gradual system development, encouraging lower-tier behavior, benefit financing, and responses to regional and system-wide crises. |
| Keywords: | unemployment insurance, European unemployment benefit system, multi-tiered system, moral hazard, incentives, public finance |
| JEL: | J65 H81 H87 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:16-264&r=lab |
| By: | Bastien Chabé-Ferret (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS) |
| Abstract: | I analyze the interplay between culture and economic incentives in decision-making. To this end, I study birth timing decisions of second generation migrant women to France and the US. Only the probability to have three or more children increases with the home country fertility norm, whereas the timing of the first two births is either unaffected or negatively correlated. I propose a model that rationalizes these findings in which decisions are the result of a trade-off between an economic cost-benefit analysis and a cultural norm. The model predicts that decisions with a higher cost of deviation from the economic optimum should be less prone to cultural influence. This is consistent with substantial evidence showing that the timing of the first birth bears much larger costs for mothers in terms of labor market outcomes than that of subsequent births. |
| Keywords: | Cultural Norms, Fertility, Birth Timing |
| JEL: | J13 J15 Z10 Z12 |
| Date: | 2016–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2016023&r=lab |
| By: | Maya Rossin-Slater; Miriam Wüst |
| Abstract: | We study the impact of targeted high quality preschool over the life cycle and across generations, and examine its interaction with a health intervention during infancy. Using administrative data from Denmark together with variation in the timing of program implementation between 1933 and 1960, we find lasting benefits of access to preschool at age 3 on outcomes through age 65 -- educational attainment increases, income rises (for men), and the probability of survival increases (for women). Further, the benefits persist to the next generation, who experience higher educational attainment by age 25. However, exposure to a nurse home visiting program in infancy reduces the added value of preschool. The positive effect of preschool is lowered by 85 percent for years of schooling (of the first generation) and by 86 percent for adult income among men. |
| JEL: | H51 H53 I18 I3 J13 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22700&r=lab |
| By: | Romina Boarini; Fabrice Murtin; Paul Schreyer; Marc Fleurbaey |
| Abstract: | We compute a distribution-adjusted welfare measure that aggregates outcomes in three dimensions of well-being, namely income, employment and longevity. Aggregation weights reflect preferences of people on these dimensions. The welfare measure is calculated for 26 OECD countries and selected emerging economies, and covers about three decades. Relying on a single theoretical model of a hypothetical representative agent, we combine life satisfaction regressions to capture the full welfare losses of unemployment with a calibration approach to capture the value of longevity. We test for robustness of results over a series of datasets and specifications and find that the resulting estimated shadow prices of (one percentage point of) unemployment and one year of longevity average 2% and 6% of income respectively. While we assume an identical utility function for all individuals, shadow prices of unemployment and longevity vary both across countries and within countries across income groups. We find that economic growth differs significantly from the growth of our welfare measure. The latter grew faster than GDP thanks to the gains that countries experienced on longevity, but was also more volatile due to changes in unemployment. Rising income inequality exerts a negative effect on our welfare measure. Gains in longevity have almost the same impact on welfare as income growth, while the long-term impact of employment was smaller. Nous calculons une mesure de niveau de vie ajustée pour le degré d’inégalité et agrégeant le revenu, l’emploi et l’espérance de vie. Les poids associés à ces dimensions reflètent les préférences des populations. Cette mesure de niveau de vie qui couvre trois décennies est calculée pour 26 pays de l’OCDE et une sélection de pays émergeants. En nous basant sur un modèle théorique unique d’un agent représentatif hypothétique, nous combinons des régressions de satisfaction envers la vie pour capter le coût social du chômage avec une approche de calibration pour rendre compte de la valeur monétaire de la longévité. Nous testons la robustesse des résultats à l’aide d’un ensemble de bases de données et de spécifications différentes, et nous trouvons que les prix fictifs estimés d’un point de pourcentage de chômage et d’une année d’espérance de vie sont en moyenne respectivement égaux à 2% et 6% du revenu des ménages. Alors qu’une fonction d’utilité unique est utilisée pour tous les individus, les prix fictifs du chômage et de l’espérance de vie varient à la fois entre pays et entre groupes de revenu à l’intérieur des pays. Nous montrons que la croissance économique diffère significativement de la croissance de notre mesure de niveau de vie. Celle-ci a crû plus vite que le PIB en vertu des gains d’espérance de vie, mais a été également plus volatile à cause des variations du taux de chômage. L’augmentation des inégalités de revenu a exercé un effet négatif sur notre mesure de niveau de vie. Les gains d’espérance de vie ont eu pratiquement le même impact sur le niveau de vie que la croissance économique, alors que l’impact de long-terme de l’emploi a été plus faible. |
| Keywords: | living standards, welfare, well-being, measurement |
| JEL: | I18 I31 I32 I38 J17 J18 |
| Date: | 2016–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stdaaa:2016/5-en&r=lab |
| By: | David M. Cutler; Wei Huang; Adriana Lleras-Muney |
| Abstract: | Using data covering over 100 birth-cohorts in 32 countries, we examine the short- and long-term effects of economic conditions on mortality. We find that small, but not large, booms increase contemporary mortality. Yet booms from birth to age 25, particularly those during adolescence, lower adult mortality. A simple model can rationalize these findings if economic conditions differentially affect the level and trajectory of both good and bad inputs into health. Indeed, air pollution and alcohol consumption increase in booms. In contrast, booms in adolescence raise adult incomes and improve social relations and mental health, suggesting these mechanisms dominate in the long run. |
| JEL: | H51 I1 I38 J10 N10 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22690&r=lab |